Sustainability, Responsibility and the Capital Market

Lakatos, Vilmos

Keywords: climate bonds, green finance, environmental policy JEL: Q01, Q56, Q57

The international initiatives of the past decades, and even more so of the past years, and the resulting international - national regulations, incentives and actual actions have shown significant progress in ensuring the survival of the Earth and, with it, of humanity, but there are still delays in the realisation of several sub-goals.
Achieving the 2030 goals, which are primarily global climate but also sustainability and social goals, faces many obstacles, as the production-service processes that have evolved over decades are not good practice in this respect.
Responsible thinking alone is not enough motivation for stakeholders, as the activities related to the transition also need to be financed and investors expect an efficient return. This paper presents the characteristics, types, and areas of use of these funding sources based on data published in 2023, highlighting international and domestic trends and the cooperation ahead in this respect. On a business basis, green investment financing is proving to be the financing with the best return prospects and the role of corporate social responsibility is becoming increasingly important, but despite its supportive nature, investments in green investments are still riskier. Hungary performs well compared to the EU average, which is at the forefront of sustainability efforts in the environmental, social and governance (ESG) field, but the level of investment in this area is still very low compared to total investment, both in terms of value (1.6%) and number of securities (5.2%). Sustainability is in the interest of all humanity, the role of high-net-worth investors is essential to achieve it, and governments need to support returns on ESG investments.